HOMEWOOD, Alabama -- The Jefferson County Board of Education held the first of two budget hearings today for Fiscal 2013 that projects the district will end the year with a little more than two months in reserves.

The district expects to bring in $261.7 million in revenues to its general fund budget, and will spend about $271.7 million. Eight-five percent of the expenditures are in salaries and benefits.

To make up the difference, the district will dip into its $58.2 million reserve fund, and expects to end the fiscal year with $48.3 million in reserves, or 2.13 month's worth of operating expenses, said Sheila Jones, the district's chief financial officer.

Superintendent Phil Hammonds reminded board members that just four years ago, it had $86 million in its reserve fund. Three years of state funding cuts, he said, meant the district had to dip into reserves to keep from making major cuts in personnel or programming.

School districts underwent three straight years of proration, or across-the-board budget cuts in state funding. This is the first year since then that proration hasn't occurred.

"Dodging proration this year was a huge, significant and positive step forward," he said. "We can control our expenditures to some extent, but we can't control our revenue."

Jones said she's not nearly as concerned today as she was a year ago, when the big unknown was whether the state would see another year of proration.

"I'm still a little concerned because we're getting close to our target of a two-month fund balance," she told board members.

The state requires school districts to keep at least one month worth of operating expenses in a reserve account. Hammonds said he prefers to maintain at least two month's worth of operating expenses in reserves because of the size of Jefferson County.

"Had it not been for that fund balance (during the years of proration), we really would have seen some dire outcomes," he said.